Last Updated: May 14, 2024, 11:38 am by TRUiC Team

Do I Need an LLC for My Helicopter Tour Business?

Starting a limited liability company (LLC) for your helicopter tour business can provide several benefits. 

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a helicopter tour business, lawsuits can arise from things like commercial property insurance claims, as well as customers suffering serious or fatal injuries as a result of pilot-related negligence or a helicopter malfunctioning.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your helicopter tour business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

A red helicopter

Should I Start an LLC for a Helicopter Tour Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Helicopter Tour Business

By starting an LLC for your helicopter tour business, you can:

  • Protect your savings, car, and house with limited liability protection
  • Have more tax benefits and options
  • Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Helicopter tour businesses will benefit from liability protection because of the risk of bodily injury or loss of life as well as general business risks. 

Example 1: In order to finance the expensive helicopter and commercial pilot licenses for your helicopter tour business, you take out a substantial loan. However, after your business significantly underperforms, you realize you will not be able to pay this loan, which prompts the creditor to sue your business for defaulting on the loan. Any liability imposed on your business to pay damages is limited to insofar as your business’s assets.

Example 2: While conducting a tour in one of your business’s helicopters, the pilot loses control of the vehicle, causing it to crash land and kill everyone inside. Some of the victims’ families decide to bring a lawsuit for wrongful death against your business, alleging its negligence led to this outcome. Limited liability would protect your personal assets from any responsibility to pay damages to the plaintiffs.

Example 3: While landing one of your business’s helicopters, the pilot carelessly damages a car parked nearby. This prompts the owner to sue your business for this property damage. In the ensuing litigation, your personal assets would be protected from any liability imposed on your business to compensate the plaintiff.

Example 4: During one of your tours, the weather turns inclement and causes turbulence, which leads to customers sustaining injuries. They decide to sue your business.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Helicopter Tour Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return. 

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform. 

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a helicopter tour business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Helicopter tour businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loansgrants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

  • You can hire a professional LLC formation service to set up your LLC for a small fee
  • Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets. 

Business insurance is especially important for helicopter tour businesses where the value of their assets (such as helicopters, hangers, and licenses) is so expensive to begin with.

Common Situations Business Insurance May Cover for a Helicopter Tour Business

Example 1: While a customer completes paperwork for an upcoming tour, her child wanders off and injures himself. The child’s injuries require surgery and several days in the hospital. If the customer decides to sue your business based on the accident, general liability insurance would cover the child’s medical bills, your legal fees, and any court-awarded damages.

Example 2: When a potential customer asks about another helicopter tour business in town, one of your employees shares some negative feedback she heard from past customers. Word gets back to the owner of the competing business and names you in a lawsuit, citing slander. General liability insurance would pay for your legal defense and any court-awarded damages. 

Example 3: In order to secure a loan to purchase a second helicopter, your bank requires you to carry a minimum of $2 million in general liability insurance. A general liability policy would ensure you meet that requirement.

Other Types of Coverage Helicopter Tour Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all helicopter tour businesses should obtain.

Commercial Property Insurance

You made a major investment in the helicopters, real estate, and other equipment needed to establish your tour business. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building and grounds as well as the helicopters and other business materials stored there.

Hull Insurance

Similar to commercial auto insurance, hull insurance protects helicopter owners against a loss or damage to their aircraft. Be sure to carefully consider policy limits because most hull insurance policies pay out on the agreed value — making it important to avoid undervaluing or overvaluing your aircraft.  

Workers’ Compensation Insurance

If you have any employees, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a workplace accident.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

Substantial capital is required in order to start a helicopter tour business. The helicopter alone will cost between $150,000 to $300,000, a private pilot’s license between $10,000 to $15,000, and a commercial pilot’s license between $18,000 to $20,000. In addition to these expenses, you will need to lease a hanger for your plane.

Visit our How to Start a Helicopter Tour Business guide to learn more about the costs of starting and maintaining this business.

The ongoing expenses of running a helicopter tour business include aircraft maintenance, aviation fuel, insurance, licenses and permits, marketing, and labor.

Learn more about running a helicopter tour business.

Helicopter tour businesses make money by charging customers for short helicopter tours across a city.

Learn more about starting a helicopter tour business.

A helicopter tour business provides tours for individuals and groups, primarily in cities and other tourist locations. The average monthly revenue for helicopter tour businesses ranges from $48,000 to $96,000 per aircraft. 

Learn more about starting a helicopter tour business.

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Article Sources

IRS: Limited Liability Company

IRS: S Corporations


SBA: Small Business Guide

SBA: Choose a Business Structure Guide

US Census Bureau: Small Business Statistics

SBA Office of Advocacy: Data on Small Business

FRED: SBA Data for Small Business